In April of 1979, Jim Bellas opened his first bicycle store in Fairfax, Virginia. But it wasn’t a love of bicycles that led him to do it; rather, it was a love of business.
“My goal has always been to create great places for people to work and to receive service,” he explains today. “Businesses provide an essential avenue for people to utilize their expertise and passions to make a difference—in their own lives, in the lives of others, and in the world at large. By creating great businesses where people can do this, I can do my small part in making a difference too.” Now the Chairman of Diplomatic Language Services (DLS), a company working primarily with the Defense Department and with the intelligence community to provide high-quality, personalized language instruction and cultural education for diplomats and military personnel preparing for long-term assignments abroad, Jim’s current line of work is quite different from that of his bicycle store days, but his commitment to creating the most positive work environment possible remains the same.
Founded in the mid-1980s by a career diplomat, DLS was the first business of its kind—a private company focused on addressing the challenges of the government’s in-house language programs. Prior to DLS’s creation, government employees were given a more University-style language education, with rigid semester schedules and group classes.
“We teach languages that the government isn’t resourced for,” Jim explains. “Almost all of our classes are one-on-one or very small groups, which offer a very different experience that works much better for many people. The instructors develop personal relationships with the students and teach not only language, but culture as well. They are contract workers, but highly prized, greatly valued, and assigned to students as the need arises. For instance, the Defense Department can call on Wednesday and ask for an instructor by Monday, and with our vast database of native-speaking instructors, DLS is equipped to fill that need.”
Jim acquired DLS in December of 2006 when the company was on the brink of bankruptcy. Under the management of a disinterested, over-committed Biotech executive who had purchased it in 2001, the business had been bled extensively of funds in order to keep his other investments afloat. Two payroll cycles were missed, and the contract employees began to take flight. The students followed soon after, and between $3 and $4 million worth of business was lost at a rapid pace. To some, the rapidly drowning business, unable to make payroll, might not have seemed like a promising investment. It would take perseverance, flexibility, and true stamina to see the venture through. Jim, however, could see the opportunity within the din and knew the service DLS provided was sound. “The reason the company was in trouble was not that the clients had changed, or that the industry had changed, or even that the business model had changed,” he points out. “Sales had sunk from $6 million at its height, to about $1.2 million at the time of purchase, but this wasn’t because the business model itself was flawed. Revitalizing the business wouldn’t be easy, but I knew it could be done.”
Jim’s first order of business was staffing. Fortunately, the language training supervisors were still in place, but he had to completely overhaul the accounting department. Adding a few capable staff members, he was able to double sales in the first few months, breaking even. Over the following year, the business earned a modest profit. The accounting department, however, was still a hurdle. After three candidates failed to get the job done, Jim’s youngest son, Chris, took over and proved himself more than capable. “He did a terrific job, systematizing and improving all of our operational processes,” Jim reflects. “It created the foundation upon which we were able to improve everything else in the company.”
The meteoric success that followed arose in part from the implementation of a new government program, AFPAK Hands. The Defense Department wanted to send personnel who were so-called “Old Hands” at Afghanistan and Pakistan back into the field, hence the title. “It was a change in the way they were going to approach the war, which was to put in people that could actually communicate instead of just increasing firepower,” Jim details. The Defense Department needed someone to administer intensive language and culture training to hundreds of personnel, and immediately. “We had to find an enormous number of high-level instructors to begin teaching within 6 weeks without a set curriculum, and without the space to do it in.” Immediately, Chris and Jim set to work accomplishing the feat, securing additional space in their building and acquiring the necessary number of qualified instructors as they pulled together a curriculum. They not only won the contract, but also entered into a collaborative effort with the client to raise the bar and make continual improvements to the program, resulting in an overwhelming majority of the students consistently surpassing the original proficiency goals for the program in their final exams.
After the contract was performed beyond expectations, DLS’s reputation soared, with the client describing the herculean accomplishment as “building the airplane while we were flying it.” In that year, the business grew to $13 million from the initial $1.2 million it had started at a mere four years earlier. In 2011, DLS grew at a pace of 60 percent and landed itself in the $18 to $20 million range, and a large special operations program may double the company on top of that growth rate in 2012.
With such monumental success, it is important to remember the journey that made it possible, which was not always easy. Precarious time first hit a year after purchasing his first bike shop when, concerned about the long commute from Silver Spring, Maryland, Jim and his wife purchased a new home near the business. Unable to sell their house in Maryland due to climbing interest rates, however, Jim found himself with an embryonic business and two mortgages on his hands when he got life changing news—his wife was expecting their first child.
The economy at the time certainly did not invite bold speculation. Other bike dealers had sized their inventory down, knowing that if they undersold, they would be forced to take out bank loans at high interest rates. Jim, however, approached his business a bit differently and opted to nurture it rather than limit it. He boldly increased its inventory, even as his competitors were reducing expenditures. “I believe in my businesses and their ability to take care of employees and customers,” he affirms. “I wanted to feed possibility into the company, not take possibility out of it.”
The choice to pursue that business strategy paid off in spades. Competing bike stores, thanks to their conservative orders, had actually created a bike shortage, while Jim’s store had a surplus. “I didn’t even need to cut prices,” he recalls, “I just needed to have the bike.” That spring, they sold every one of the bicycles they’d stocked, tripling the size of the business and pulling in a profit. One year later, they were able to open their second store, and shortly thereafter, Jim acquired a floundering competitor for the price of their inventory alone.
“For 30 years, I did one thing—bicycle retailing,” Jim recounts. “This stands in stark contrast to the following six years I spent as a consultant, in which I did about thirty different things!” This variance more closely mirrors his earliest years, which was spent moving around quite a bit. Jim’s Greek-American father met his Italian mother while serving on a US military base in Italy during and after WWII. Born in Italy, Jim spoke Italian for the first years of his life. His father asked to be moved to Greece, where he calculated that, receiving hardship pay, he would do better for his family than he could by returning home. Thus, at age three, Jim and his mother joined his father in Greece, where young Jim quickly picked up his second language. A young child translating for his Italian mother, he would often scold her, “You need to learn Greek!”
A few years later, the family came to the U.S., where, at age six, Jim began learning English, his third language. As a military child, he learned to quickly adapt to new surroundings as the family relocated again and again, and in his adolescence, he found himself on a German military base, where his entrepreneurial tendencies first began to show. He took over a TV Guide route from another boy who had become bored with it, and grew his clientele from 15 to 100. Inspired by his success, he began cutting lawns, and saw that being reliable and capable enabled him to edge out the competition. His father, a product of the Depression, was more conservative and less entrepreneurial, so Jim’s own ventures were intuitive and self-taught, with a few hiccups along the way. “Once, I gave $350 to a friend to invest in a stock, and then he just left town,” Jim remembers. “It really colored my view of investing. I trust investing in businesses that I can control, but turning my money over to somebody else doesn’t interest me. If something’s going to be done, I’d rather do it myself.”
It makes sense, then, that learning to delegate has been among the biggest trials of Jim’s professional life. He references the book What Got You Here Won’t Get You There, by Howard Goldsmith, as he recounts how his micromanaging had to be stripped away over time. “When we were turning the business around and I had limited capital, I told people at DLS that I needed to have everything come through me,” he recalls. “Of course, with four or five direct reports, I could keep up with that. But when you get to thirteen reports, it becomes unsustainable.”
In the face of the youthful swindle that lost him $350, leaving decisions to someone else always felt like the biggest risk of all to Jim. However, a wake-up call came from his wife during a critical period for the bike business. In the midst of moving their largest store, she suddenly announced, “We’re going on vacation!” Jim replied that there was no possible way for him to take a vacation, but his wife simply repeated that she and their two sons were going on a vacation. “I hope you’ll join us,” she added. That wise insistence proved to be the turning point for his approach to management and leadership when he suddenly realized the gross imbalance in his life, and within 24 hours, he had taken all the necessary steps to delegate the important work of the next 10 days. The bicycle business went on to become the number one Schwinn dealer in the country, the number one Trek dealer in the country, and the number one Cannondale dealer in the world. Whereas a typical bike shop grossed $335 thousand annually after 5 years, Jim’s stores opened with around $300,000 to $400,000 in the first year, and would crest at around $2 million several years later.
Ultimately, Jim’s bicycle business declined, but only after years of tremendous growth brought venture capitalists onboard. He resigned and began working as a consultant, learning about various businesses while also learning about himself before his ultimate acquisition and successful operation of DLS. “Failure for me is when I do something that doesn’t work and fail to learn anything from it,” he explains. “Over the years, I’ve had a lot of learning experiences, but never failures. If I learn something, it’s not a failure, it just didn’t give me the outcome I wanted.”
In reflecting back on those years of learning and success, Jim recalls one particular evening when he and his father were watching television together when his father suddenly said, “I want to thank you.” When Jim asked why, his father responded, “For never reminding me that I told you that you shouldn’t start your own business.” Indeed, Mr. Bellas had pointed out that he had a great job that promised success, stability, and a sure future, cautioning him against giving it all up to pursue a riskier path. “I assured him, however, that it was important for him to be that cautionary voice in the world for me,” Jim says. “Only after placing your own aspirations within a context of reason and sensibility like that can you truly judge your commitment to them. I knew that what I had was great, but I knew that if I followed my inner passion to create businesses where people could best utilize their passions, what I could do was much greater.”
To young people entering the business world today, Jim advises two things—persistence, and the wisdom to know when to stop persisting. “Very seldom has there been something that was just given to me,” he acknowledges. “I had to persist, and persistence has its rewards. However, sometimes you have to back away for a while and see if things move towards you. Sometimes, if you stop persisting, that which you pursue will come to you. It’s not giving up, it’s waiting.”
Beyond this, Jim also emphasizes the importance of staying committed to one’s convictions. “I have always been driven by the idea of creating companies with frameworks of strong integrity,” he affirms. “Staying committed to this idea didn’t always seem like the easiest or most direct course of action, but I know it was—and continues to be—the most important one.”
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